Podcast 218. Successful Market Strategies for a Full Time Trader with Tony Pawlak

Average Joe Finances:
0:01

Hey, welcome back to the Average Joe Finances podcast. I'm your host Mike Cavaggioni, and today's guest is Tony Pawlak. So Tony, super excited to have you on the show. Thank you so much for taking the time outta the day to join me.

Tony Pawlak:
0:13

Of course, man. Thank you so much for having me. Honored to be here.

Average Joe Finances:
0:16

Absolutely. Hey, Tony, I wanna start this off the same way I start every podcast episode, and me and my guests wanna know more about you. So if you could share a little bit about yourself. Tell us your story. Who is Tony Pawlak?

Tony Pawlak:
0:30

Man. Yeah, it's a wild story, so I'll give you the little condensed version that's still somewhat long. Yeah, man, I grew up my entire life in Arizona big into sports played basketball, football, baseball I ended up playing middle linebacker at BYU and my first year there, broke my neck and just in practice, it wasn't even in a game or nothing cool like that, it was just practice. Decided right after that I was like, you know what, I get married right after that and I was like, I'm just gonna go run my family business in there back in Arizona. Dragged my wife back to Arizona. It's a trucking business, we, my dad and I just, he'd been building this business for quite a few years. I jump in and him and I just hit the ground running and we get going. And as anyone knows, with a business it's day and night, right? It's your family, it's your life, it's everything. And I ran that for eight years. My dad pretty much semi-retired. And I took it over. After eight years, I just felt like there was something more important in my life. Yeah. I just felt I'm spending every waking moment of my life running this business, and I wanna start living my life, right? So my wife and I decided to quit our job. Just, I was just gonna pull my dad outta retirement. I'm like, I'm doing my own thing. At this time, I had started trading the stock market kind of on and off, and I was like, this is what I want to do full-time, right? This is what's, that's my dream job. This is what I want. And I felt just something inside of me was just like, this is what I need to do. I felt like God was just pulling me there, universe pulling me there, and I was like, I need to do this. Everyone said Tony, you're gonna lose. Like everyone fails at this, you're just gonna lose everything. And I was like I know, but I'm supposed to do it. So my wife and I, we take our life savings. I leave my good cushy job, safe job, we come back up here to Utah where she's from. And I was like let's go. We're gonna be millionaires in months, right? This is what I'm, this is my calling. This is what I'm supposed to do. And so I start trading full time. I'm living the dream. This is great. I started with a $30,000 trading account. Okay. That was stick number one. Just my expectations were very off. A great trader's gonna make 10% of their trading account a month. Okay? My bills at the time, we had bought a house, we had cars, we had the normal life, right? And so I had about $5,000 a month worth of bills that I needed to cover. And I was like, chump change man, millionaire in a couple months. And I traded somewhat successfully, but it's not like I was just crushing it and I wasn't ready for the pressure that came with like I, this is no longer just for fun, like I have to make five grand by the end of this month. Right after the first week and a half, I was down $5,000 in that account and I was like, okay, alright, I need to make 10 grand over the next, three, two and a half weeks-ish. And it started spiraling from there. After the first month, I had already blown up that entire trading account. It was gone. That money was gone like that. That was supposed to be our golden nugget. We did have money set aside for savings. We pulled all of that out, refunded that account. Two weeks later, that money's gone. I am just falling all over myself, man. Just falling all over myself and the pressure, the stress, my wife is just alright, it's 60, 70,000 down in the, month and a half. This is not, we're supposed to be millionaires by now, right? A month and a half in or whatever. And. We still got bills to pay. We got things going on. And so I was like, all right I'm gonna go out and I'm gonna get a loan. We had really good credit, good. We were very successful financially our whole life. And I go out and get a huge loan and I burned through that loan in ano in another month, give or take. I was just melting, man. Just melting. And so I go out and I get another loan. Lost that in three or four days on a Hail Mary shooting out their couple trades. It was bad. Like when I say my store was bad, like it was bad. So now not only do we have our mortgage that has barely been getting paid car loans and everything else, I've also got six, five to $6,000 in debt. Payments every month now of money that's already gone. And I didn't tell the banks what I was doing with it. I just got a personal loan and. So I was like let's go try to get another loan. The banks at this point are yo, bro, like what are you doing? Go get a job. I don't know what's going on. So I start going to different banks and figuring things out. I get credit cards anywhere I can, and I'm just cashing out credit cards, like 30% interest rates, just cash it put into a trading account. And so we're at credit cards now. My account's at 15,000, and it finally just starts hitting me like, I can't keep doing this. The bank, I can't remember how many credit cards and loans I've taken out after this process. It's been three to six months timeframe and it's just a nightmare. And I'm like, I just, this is it. The banks were like, dude, this is it. You're tapped. I don't know what you're doing, but you're tapped. And it was always the same problem. I was trying to just like triple my trading account every single month because I had to, I had bills to pay. And so I sat back and reached out to my mentor Jeremy Newsom with Real Life Trading, and I was like, brother, I'm drowning. I'm drowning. And I hadn't reached out to him before this. I just he taught me some things in trading and things like that. And first things first, realizing that trading is a lot more, there's more to making money in trading than just understanding how to trade, right? There's so much more that goes into it to actually be successful. Anyone can make money, but people can't, who can keep it after a hundred trades? That's the, that's the measuring stick, right? So I'm drowning in debt, I'm in serious trouble. I'm at my last $15,000 and that's all we have to our name. And it just, it starts to hit me that I like this. Is it like either I go back to my old life and this time I'm hundreds of thousand dollars in debt and everyone's I told you so Tony, and I feared that a lot. I had a lot of fear at that time. Literally our grocery budget with my wife and I was like $10 a week, maybe 15. That's all we had. Like we were living. Just the most poor we could ever consider.

Average Joe Finances:
6:47

It was like the college student budget ramen noodles and.

Tony Pawlak:
6:50

A hundred percent.

Average Joe Finances:
6:51

Yeah.

Tony Pawlak:
6:51

Yeah. I was like, we used to joke like ramen was a luxury. If we could afford ramen, we're like, Hey, we're doing, it's like it was rough, man. And I go back and my wife this day, she can buy whatever the heck she wants, man cause the stuff I put her through and her staying strong and her sticking in it because, People are like, how could you know? She was the one telling me to keep going. I was the one saying, let's just stop this. I'll just go get another job. I'll just start driving a truck again, whatever. And she's no. Like we've come too far to only be good. We're not gonna quit this. We're gonna find a way. We know that this is our calling, that we know this is what we've been led to do. It's what God's calling us to do. There's a reason for this. Then it was right then in that timeframe too, that someone came over for a food drive, I think it's from a church or something, and she donated like three or four cans of like corns and beans. And I was like, seriously? That's all we had, right? She donates it all and she's I'm just tired of living in fear. I'm tired of living in scarcity of I don't have enough. Just squeeze everything you have. Don't let it go because there's just not enough to have, just for ourselves. There's never enough. And we were struggling hard, and we had a right to squeeze everything. We had nothing. We were just hoarding everything we had. And it hit me right then and there when she said that of, I'm done trading scared. I am done being scared to lose more money. I like, I have to make money. Like I was just trading outta desperation. And I did that from day one. I have to make money by the end of this month. I have to. And everything started to change from there. I started to sit back, like literally that weekend. I sat back and I was like, okay if you want me to be here, let's make this happen. I've got a problem. I need to make this much money a week. I need to make this much money a month. I have this to work with. How can I do this? And I just start solving problems. I'm like, it's selling options. So I'm an options trader. I love options. Still did, did that at the beginning. And it's laughable. Now I look back on what I thought I knew compared to, five years later it's a whole different story. Now, of course, that's how it should be, right? You should be a different person after five years. So I was like I can sell credit spreads and that will make me like $500 a month. How can I make 1,500 a week with credit spreads? I just start problem solving and I developed a strategy doing that and I was like, okay, I think this could work. And I backtrack. I literally spent like 15 hours a day for four days straight, just back trading the strategy. And I'm like, there's something to this. And I start implementing it with our 15,000 that we have. And sure enough, right away that first week we made like 1700 bucks and the next week we made a thousand. The next week we made 2000. The next week we made a thousand. We're just bouncing right around and this was the first time we've actually seen any consistency come into our life. We slowly but surely start pulling ourselves out. But it was a combination of really just changing my mindset, plus really just changing my whole approach to the markets. It came from like this desperation to this calmness, and I think that calm is what allowed me to finally start thinking clearly and solving the problems that were in front of me instead of trying to just sweep the problems under the rug. And just like it was all my ego, it was, I didn't wanna look like a failure in front of everybody. And. It's crazy now 'cause looking back at this story, I proudly tell the story to everyone I am. I am not ashamed of my start because going through everything that we went through, I literally cried myself to sleep for a year. This was not a short process. This was a long time, and I am so proud of that now because I averaged thousands of hours a year coaching others how to trade. I still trade full-time. That's my main gig. I go out and I help people that are struggling. Like I go find the Tony five years ago, Tony out there in the world, right? That's trying to do this. And I walk them through it and I've gone through everything.

Average Joe Finances:
10:48

Tony, can I ask you real quick.

Tony Pawlak:
10:49

Go ahead.

Average Joe Finances:
10:49

What was said during that conversation that you had with your mentor that kind of flipped the switch for you to change your mindset? cause when you first went into this, you were talking about how. You were just taking loss after loss, and you were down to you had your last $15,000 left and then you had this conversation with your mentor, and then everything changed. So what was the out outcome? What was the conversation that made that happen for you?

Tony Pawlak:
11:14

Yeah, that's a great question. He helped me to just gain some confidence. He's Tony, you're this far. He's you're doing everything right except for these two things, and. He just brought it to my knowledge of these are just a few things you're on the verge of being successful. It's a pretty thin line between success and failure. So to stay in the markets and it's clicking the button 20 seconds earlier than night, right? It's little things like this that I was just always on the wrong side of that. He helped me to gain some confidence and see that I'm so close to the finish line. I was just, and I was done. I was the type of guy that's I'm one strike away from hitting gold in this mine and I'm just gonna go ahead and turn around after tunneling for five miles.

Average Joe Finances:
11:53

Oh yeah.

Tony Pawlak:
11:53

Like that was me.

Average Joe Finances:
11:53

Like that popular meme that you see all the time.

Tony Pawlak:
11:56

Exactly.

Average Joe Finances:
11:56

About persistence.

Tony Pawlak:
11:57

That was me in a nutshell. Yeah.

Average Joe Finances:
11:58

Yeah. Okay.

Tony Pawlak:
11:59

Yeah, exactly.

Average Joe Finances:
12:00

Right on, man. So yeah, so you have this conversation, it changes your mindset. Changes how you're doing your trading, right? And now you're at the point where you started to see some success start coming in. The goal was 1500 a week and actually it was what? Five? You were getting 500 a week when you first started and you said, no, I need to get this up to 1500 a week, and you were able to get there right. Now, once you got there, when you had this momentum going, how did you step it up from there to take it to the next level?

Tony Pawlak:
12:29

Man. That is such a great question. I had to realize I had a lot to learn. When I first, when I jumped into this to trade full time, I thought I was the man. I thought I just knew, like I took the approach, like I already know everything and the market's humbled me pretty quick. I like to say the stock market just shows you what you need healed, and it's just a revealer of yourself. That's really all it is, and that's what I help my students to see. If you're not profitable, it's because. You have something that you need to improve on, and it's the stock market forces you to be your very best self. If you wanna be successful in investing in anything really in business, you have to become your best self. If you struggle with being patient in life, if you're yelling at the person in a traffic jam it's gonna be when business requires you to be patient. When this, when trades require you to be patient, you're not gonna have that skill and it's gonna cost you money. And so everything reflects. And so I had to start really changing who I was. And that's what started to elevate things. And it started to catch on. If I want to be successful at this, I need to be humble myself and realize I don't know everything. I need to humble myself and realize failure's, okay, failure is the path to success. And so I need to stop being scared. A failure because once I started making money in order to elevate, I was like what if I give up what I've already done? What if I start losing, I have bills to pay. And at that point I was still just barely making it. It's not like I was, $20,000 ahead. It was just I had enough, if I succeeded every single week, I paid my bills. If I failed, we didn't get our bills paid that week, and I had to make it up some other way. And so the pressure was on to be perfect In my trading, and that weight pressure.

Average Joe Finances:
14:07

Yeah. Tony, that the pressure was on you before that too. So it was something that shifted India because it's not just the pressure. It was, I think it was how you went about attacking your problem, right? You changed how you attacked that problem versus what you were doing before. Yeah. And that's actually something else I'm curious about too, right? cause you had mentioned earlier that there's such, there's this thin line between success and failure in trading, right? And you were just right there on the cusp. Just missing it, but what do you see are like some of the most common mistakes people that, that are trading are making that keep them right under that line that you were able to overcome?

Tony Pawlak:
14:46

Man, another great question.

Average Joe Finances:
14:47

That's what I do. That's what I do.

Tony Pawlak:
14:49

Sweetie berlin, bro. You got this. Just bring it out. Man, there's like a thousand things that come into my mind right now, so I'm trying to figure out what I could give your audience is the best advice at the moment. Number one, I would say realize that trading is simply a skill. Learn that skill. Don't think that just because you're smart or you've had success in other realms in life, that you can walk in and be smart enough just to make it in the investment or trading world. Okay. Number two, accept the loss. Stop trying to win and stop trying to avoid losing because it's gonna be impossible. Trading the stock market is flipping a coin, okay? You get a thousand dollars on heads. If it lands on, tails you, pay me 300 bucks. Would you do it? Is that a game you'd play?

Average Joe Finances:
15:42

I mean, it's 50 50, but at the same time the odds of losing more you'll lose more if you lose so than you would gain if you win. So it's not really.

Tony Pawlak:
15:51

You might wanna play thousand dollars, right?

Average Joe Finances:
15:52

Oh, oh, I think you said heads with a hundred. Okay. Okay.

Tony Pawlak:
15:55

Yeah. So a thousand profit on heads losing 300 on tails.

Average Joe Finances:
15:59

Yeah. If it's 50 50, then you've, you got a good chance of being profitable then.

Tony Pawlak:
16:03

A hundred percent. A hundred percent. And so we flip the coin. The first three coin flips are tails. So you're down 900 bucks. This is where the emotions your logic is saying mathematically, flip the coin a thousand. You can flip it as many times as you want. Flip the coin a million times, it's gonna work. Law of averages back to 50 50. There's gonna be times where there's tails. There'll be times where there's heads. But as long as you're losing less and making more on heads, it's a good game. Because exactly. If with you misunderstand, you hear that, it's if it's, you know the numbers, you need to win big and you need to lose small. And that's what you need to focus on in trading. It's not about being right or wrong on a trade. I'm wrong all the time. All the time. 50 50. Actually, I have strategies that do 90%, but they're different math and we'll go over that. But it's a 50 50 game, right? Flipping a coin and if it lands on tells three times in a row and you're down $900, people then lose it. The logic goes out the window and they go, I'm down $900. What if it lands on, tells one more time I'm down 1200 bucks and I can't, and they don't logically stop and think. One flip of the coin, it lands on heads. You make a thousand bucks and by the way, flip that coin a hundred times.

Average Joe Finances:
17:12

Yeah. Now you're up.

Tony Pawlak:
17:13

Now you're up, right?

Average Joe Finances:
17:14

Yeah.

Tony Pawlak:
17:14

Over a hundred times you're gonna keep climbing in that graph. Your p and l is going up, your profits are increasing. Are you gonna have losses along the way? Yes. And that's all trading is. Your job is not to be correct on a trade. Your job is to have an edge, give yourself a 50 50 shot, and then when you take it and the markets re and markets say, agree with you, and it's a winning trade. You need to let that win as much as possible. If the markets disagree with you and it's a losing trade, you need to try to lose as little as po as possible, okay? That's your only job as a trader. When you're wrong, you lose small. When you win big, people do that. Your natural instinct, your natural emotions for everyone is the exact opposite. You're up a hundred dollars. They click a button. It's I'm up $400, I'm up $500. And then they click the button, they go, oh my gosh, I just made $500 in 10 minutes. I'm the smartest person. This would've taken me five days of work. That's our natural instinct that anyone would do. And then the natural instinct also on the other side is you take a trade and you're down a hundred bucks. You're like and it keeps going. You're down $200 and it keeps going. You're like, ah, I should get out. And you're down $500. And you're like, it'll turn around and you're down a thousand. It'll turn around and you just won't press the button to get out.'cause you don't wanna lose that money. So most people lose big and win small and whenever they go through that losing and they lose $3,000 on one trade, when they're up $200, they go, I just gotta take it cause what if this one loses two? So they just constantly put the math in the opposite direction of where they need to go. And so they keep losing big and winning small and they keep losing money over, over the long run. So those are the two things that I could help anyone, listener, just if you could change your perspective. You have to be different. 90% of the people that trade the stock market fail, and they fail because they're listening to everything natural in the world. If you had a 50% success rate as a surgeon, you're done. You're out of business, right? If you kill half the people you work on, you're out of business. If you're a dentist and you just destroy people's mouth, you're outta business, right? If I'm a truck driver and I deliver half the goods on time and in one place, and I get in a, I get in an accident, the rest of the time I'm out a, I'm out of a job. So it's really hard to take this, like I have to be perfect mentality to be successful and go into the investment world where it's like, Hey, you're gonna be wrong all the time. Right? 50 50 is good. That's fantastic. Good enough. And it's just our natural selves, the natural way our brains work and think, don't allow us to be successful in the markets. And man, if people could just, do that. Then they would be crazy successful in the stock market. It's just easier said than done. It's like walking a thousand miles, just put one foot in front of the other. But it's hard, right?

Average Joe Finances:
19:55

Sure.

Tony Pawlak:
19:55

It's hard when you're down, when you've had four losing trades in a row. I'm just gonna put smaller size on now, and then the next trade's the winner. And they don't make any money because they lowered their size and there's just so many things that go into it. But yeah, that's just, man, you could get me on hours of things that people need to do, but that's, The two points that I think are gonna help the most people.

Average Joe Finances:
20:15

So I wanna ask you then too, 'cause I know people that kind of do this both ways, when it comes to being a trader, is it something that you should be doing full-time or is this something you can also do as like a part-time, like side hustle type deal?

Tony Pawlak:
20:33

Oh, total side hustle. You could do, you do either or? The shorter the timeframe, so like your day traders and stuff. The markets are, let's see, man, sorry, I'm just trying to make sure it's the easiest way to understand this. I don't wanna get too far ahead of them. People are like, what are you talking about? The markets are just a microcosm in amongst themselves, so to say. So you have a one minute chart and that one minute chart's gonna move just like that, for people that can see on YouTube. It's just it's a little, it's moves like a little ss like a little n right. Inside of that, you have a five minute timeframe and so on one five minute candle bar on a one minute, you have a whole bunch of little end curves, right? S-curves and same thing on an hourly and a daily and a weekly timeframe. So I could find my setup 20 times during the day on a one minute chart, and I could day trade that, and I could make, 20 trades, or I could go to a daily chart, or it takes three weeks for one of those setups to even come in. But I can do it. It's the same exact thing. So if you wanted to do more of a side gig, it just takes, you know it, you're not gonna have 20 setups a day, you're gonna have one every couple weeks. But you do that per stock, you do that with a hundred stocks, and you start getting a few setups. So you could totally do this full time and take up all day, or you could do this in your sleep where, I'm out on a monthly chart and I have two setups a year, and I'm gonna have to be patient enough to wait nine months, 10 months for a setup to come. But when I do, I can make. You can make your yearlies. I know people that make a million dollars off of one to two trades a year. I make a huge chunk of profits off of those same exact setups. It's just a bigger timeframe. So it takes longer for that same trade to come, whereas on a one minute it happens 20 times in a day. Does that make sense?

Average Joe Finances:
22:15

So it's not necessarily, it's not necessarily day trading at that point. It's just trading, right? Just trading,

Tony Pawlak:
22:20

yeah. And.

Average Joe Finances:
22:21

So actually what is the difference then between. Somebody that's just investing in the stock market versus somebody that's actually trading in the stock market.

Tony Pawlak:
22:29

Yeah. So investment in my mind is I'm putting it in and it's there, it's my nest egg. I'm never touching it or I'm not gonna touch it for 50 years. That's investing to me is You're gonna have your up.

Average Joe Finances:
22:40

That's kind what do with the stock market, I just just put it in there and leave it alone.

Tony Pawlak:
22:44

Put it in there. Leave it alone. When you have some skills now where you can start to see and you understand how these markets move, like I'm a big price action trader, which means I don't use indicators and stuff like that. I use the actual movement of the stock to tell me where it's gonna go. Bullish or bearish. The stock will tell you, it shows you its hand, right? If you know what to look for, if you just learn the skills, you'll look at this and go, There's a 80% chance the stock's going up, and most importantly, I know exactly where I'm wrong. So that sets me up where I can risk, where I can lose very small and win very big. It's just all about the math. Yeah, it's just, I get sidetracked, man. Sorry, what was, go back to that first question. What was that again?

Average Joe Finances:
23:26

Yeah, so just talking about what the difference is between somebody that's

Tony Pawlak:
23:28

Oh, that's right.

Average Joe Finances:
23:28

Best thing versus trading.

Tony Pawlak:
23:30

That's right. Sorry. Man, too many football concussions. I tell you what that is one side effect. If I lose short-term memory, just bring me back to life here. Once you start to learn how these markets move, then you can start to realize, hey, we just had a 20% move up. I can take my profits. I know exactly where it's gonna come back down to, or the area it's gonna come down to, and I can get back in. So now you're just you're leveraging yourself where you're not in these drawdowns. You're only catching the improvements, right? You're only catching the profits because the markets move in a structure. They don't just move in a straight line vertical. So if you now know how to recharge, you can do this in your investments in 401K. Like I teach a lot of my students, a lot of my students are getting ready to retire 60, 70 years old. And I've taught them like, Hey, you can send your money out to a money manager, and they probably won't ever look at it. Even though they charge you, they probably will never will. I teach them how to read these markets and for me personally in investments, I never exit my investments ever, but you can buy insurance on the stock market and most people don't know this, but it's out there for everyone and anyone can do it. It's like buying car insurance, right? You have a hundred thousand dollars car and you spend a hundred dollars a month on it to insure it. You can do the exact same thing with stocks, so you can buy, puts it's options, right? Insurance. You can't lose any money on the way down. It fully covers you dollar for dollar on the way down, and then you can just choose the thick to take the cash value, or you can choose to have it sell your shares at the price that you bought your insurance at. And the simplest way I can put that, I'm trying to keep it pretty basic. So I teach my students how to buy insurance, so they didn't ever have to worry about any downturns because covid hits and the markets are crashing and everyone, let's say you bought Apple at 20 bucks and apple's at a hunt, $200. You're like I don't wanna get out of it, but yet it's crashing, right? So then they sell it, and then it rampages and goes a hundred percent higher and they're not in it. And then when they get back in it, now they're owning it at 180 when they owned it at 20 or 30 bucks, right? So the difference in investing is it's a long-term game. And that case learn how to buy your own insurance, learn how to manage your own money. Take your 401K, put it under your learn the skills to manage it. It's not that hard. Learn the skills to manage it and learn how to buy insurance, and that's all you have to do with your life and you're stress free. Your money manager's not doing that. It's, there are some good ones, but for the most part it's just they're clicking the buy and sell button for you. Like you can do that. So learn how skills trading is a lot more active in the sense of. I have my long-term holds, but I'm in and I'm out. I'm catching 20% moves and I'm out and I'm waiting for my next setup. Let it come back down to my area. I buy it, catch the 20%, move back up, and the same thing did a short side. So that's the difference, is you're looking at a chart and you know there's a high probability that's going to here, and I know if it goes to here, I'm wrong. And you're just putting the math in your favor and you're just setting yourself up where you can catch these moves without actually having the long-term risk. Of ups and downs throughout the market, you can catch.

Average Joe Finances:
26:32

Yeah, that's.

Tony Pawlak:
26:32

And make money to the upside and downside.

Average Joe Finances:
26:34

Very interesting too cause then you have a good idea of like when it starts coming down when it gets to a certain point when you need to get out so you don't take such a huge loss versus, when it's time to come back in. Okay, I'm starting to see where this trend is going. It's time to pull out of this one and we'll get back in once, once it gets to that low point. And I feel like. In a perfect world, that's what everybody pictures investing in the stock market is, right? Yeah. People look at trading and they're like, oh yeah, buy low, sell high. That's the standard, right? That's what you have to do. But if you don't know what to look for, you're not gonna be able to figure out. When is the low and when is the high, right? Yeah. And so I have a buddy of mine that, that he does this and he does quite well with his day trading. And he's got he sets like these alerts up and there's like a certain thing, like certain percentage drops or certain percentage raises where he sells. And then or for both right? And then certain drops where he'll go in and buy 'cause he knows, okay, it might not be at the very bottom, but we're pretty close. So that's what I'm gonna get in. And he, he sets up these these alerts and alarms and that's how he does it. I was like, okay, that's pretty cool. But for me I, I don't know man. I live in Hawaii, so if I wanted to get up and try to day trade, man, I gotta get up at two o'clock in the morning. It's just clearly, I don't know, man. That's rough. I'm not trying to get up that early. I spent 20 years in the Navy getting up early all the time. But it wasn't two o'clock in the morning. It was more like four o'clock. But I don't know, man.

Tony Pawlak:
27:57

I got a lot of buddies out in Hawaii that trade full time and.

Average Joe Finances:
28:00

Really?

Tony Pawlak:
28:00

Yeah. I don't know how they do that.

Average Joe Finances:
28:02

So they're early birds. They're catching the worm.

Tony Pawlak:
28:03

Early birds. Yeah.

Their days done at 8:
28:04

00 AM for them. And I'm like, man, that's cool. You have your whole day. But I did the night shift for eight years. Yeah, it's snowfall.

Average Joe Finances:
28:10

Yeah.

They're, they may be done at 8:
28:10

00 AM they're probably going to bed at six,

Tony Pawlak:
28:14

Exactly. Yeah. You're having your trade house no matter what, but yeah, it's, mountain time for me is a great time. Market's open at seven 30 in the morning. They're done at two. I feel like that's a good time, but Yeah.

Average Joe Finances:
28:25

Yeah.

Tony Pawlak:
28:25

Definitely.

Average Joe Finances:
28:26

Especially, definitely, that's your full-time gig, so that's great.

Tony Pawlak:
28:29

Yeah, a hundred percent.

Average Joe Finances:
28:30

So speaking of, that, that actually makes me think a little bit too are there certain times of the day that are better to pay attention to the market? Or is it like, hey, you gotta get up and you gotta get in and be in it all day. What does that look like? What does your standard day look like when you're trading.

Tony Pawlak:
28:44

Okay, I'm back. Most people struggle in the markets 'cause they have this absolute mentality, right? My day are very different depending on what the markets are doing. So I have key levels on a chart that I'm like, okay, if we get past this is gonna mean that there's a good chance we're going to here. If we get past this is a good chance we're going to there. The stock market is just people. People are predictable. If people are loading in the stock market and it gets below this spot, a lot of people are losing money all at once, right? If the fire alarm goes off in the mall, most people are gonna make it to the exits. They're pretty predictable. So day trading is all about reading human emotion and putting yourself in people's shoes. If I bought this yesterday and I was planning on making all this money, and the very next day it gapped down, so before the market's even opened, they're down 20 grand. How would you feel? So it's not so much like I wake up and I trade, what's the best time of the day to trade? It's some days I don't trade at all because the markets are not crossing that key level. I can't really get a good read on how people are feeling. It's all about, I know if we get here, people are gonna be extremely greedy. People are taking their profits, people are gonna be excited. I know if we get here, people are gonna get very scared. And I also know that some, the big players might be buying here and here. And so putting yourself in people's shoes, Is one of the best things you can do to be successful in day trading. And my day is dependent on if I can get a spot, if I can get a move in the market that I know will trigger emotions. And if I can get that emotional trigger and the markets are proving that, I now have an idea of where these things are going and that's where I trade. So to break it down in a simple term the mornings are where majority of your traders, day trader professionals are gonna be. So they're gonna make their money, they're gonna get in and out. Sometimes they hold all day long. Most of the time they're out within the first couple hours of market open. You'll see that with the volume start to drop off, two to three hours. They've hit their money they've caught that emotional wave. And later in the day, it gets harder to read that emotion because the mo in the morning is when everyone waking up and going, I'm rich, or, oh my gosh, I've lost everything. That's where your emotions are at, and that's where you're able to rethink that.

Average Joe Finances:
30:52

That makes sense. That makes sense.

Tony Pawlak:
30:54

Yeah. So.

Average Joe Finances:
30:55

It's a cup of coffee and I'm wealthy or a cup of coffee and Oh my God, I can't afford coffee anymore.

Tony Pawlak:
31:00

Exactly. That's very well put. I'm still in that line, man. Exactly.

Average Joe Finances:
31:04

Gotcha. No, that's awesome, man. It's I figured that was gonna be the route, it was like more the morning time. But I like how you bring this whole psychological piece to it, right? It is about human emotion, right? Because, I've had this conversation several times on this podcast about emotions and money being tied to your money and you know what your relationship with your money is. There, there isn't many people out there that will go and make a purchase. That won't have some type of emotion tied to it, right? And that's including investments in the stock market or any trades that they might be doing. There is some emotional equity that goes in with that as well. And so I think it's, I think that's one of those really important takeaways for the listeners is pay attention to the emotions of both money and people when it comes to their money.

Tony Pawlak:
31:53

A hundred percent. The emotions around money is the reason why everyone fails in trading a hundred percent. One of the first things I do with my students, I figure out when they first started learning, was it really easy, like 2021? You just close your eyes, press the buy button, come back two weeks later, you make money no matter what. It just goes up, right? Everyone that made millions in 2021, they lost five. 5 million in 2022. Yeah. Yeah. It's the same game and there's so many commonalities to it. So if I find out that they started when it was really good, they normally struggle with risk control and a few other factors. If they started trading the stock markets when it was really hard, like only the advanced traders could see everyone else was getting suckered in. And so they're always buying as soon as it was going the other way. Like every time I buy it drops. Like they just can't get it right and it's really hard to trade. Then they normally struggle with the fear of losing money. That's something they have to overcome. So they get into a trade and they're so scared that they're gonna lose, that they end up screwing up a trade instead of just letting the math play out. They're the ones flipping the math the opposite even more. Everyone has to go through both those cycles at some point. And so it's about overcoming both of that, but the emotional side of everything is the key. And that's why you can't just learn a strategy. And by the way, I teach strategy strategies are important. They're the tool to solve the problem. But if you go in the morning, your car doesn't start. You don't just go walk over and grab a pair of pliers. You don't even know what's wrong with it, right? You don't grab the tool. You figure out what's going on. So you pull the hood and it's oh, my battery is dead. What tools do I need to take my battery off this car? A strategy in the stock market is just the tool. It's what you use to make money, but it's not the end all be all. You have to diagnose the markets. I could give the world, I have bull strategies that have made stupid money, but if I gave you that strategy last year and the markets are crashing, you're gonna be like, this strategy sucks. I have bare strategies that if you would've implemented this year when the markets are just rampaging, you would've lost money. It's not the strategy, that's the secret. And I think everyone wants this quick money. What the secret to being successful is learn how to diagnose these markets, figure out where they're going so that you can take the tool and solve the problem. And then the second thing is accept a loss. Before you get right here, I'm gonna pause it real quick. This is the most important thing. If you just implemented this one thing, probably across everything in business, you will make millions. And that's not just a joke, that's the truth, except the loss. Before I get into a trade, that money is already gone. If I'm gonna put a hundred thousand dollars on this trade, I am a hundred thousand percent okay to lose a hundred thousand dollars. It's gone. It's not gone when I hit exit on the trade, it's not gone. When I'm up 50 grand and maybe it'll turn around and I lose it, it's already gone. In my mind, I've already accepted it. That's worst case scenario. It's gone, so I don't need to try to save it. When I'm in a trade, I can let the trade work, I can make three, 400,000 off of that trade. I can just let it work because I'm not trying to like, oh, I don't wanna give anything back. I don't wanna lose this a hundred thousand target.

Average Joe Finances:
34:55

Yeah, you don't wanna get to the point where it's like it's down to 85,000. You're like, oh man, I lost,$15,000 I gotta pull out while I still have 85, a hundred percent. So yeah, I think that's great. Tony, when you're talking about that mentality of going into it saying, this money's already gone, so that way you don't have that fear of pulling out when you're at a period where there's a loss, but there's still so much to gain coming back.

Tony Pawlak:
35:17

Professional traders, they always know their risk, right? I'm surprised by how much money I make. I'm never surprised by how much money I lose everyone else. The 90% that don't make it in the markets, they're shocked by how much they lose, and they know exactly how much they're gonna make. They get in a trade. If this works, I'll make $20,000. And they have no idea that if it doesn't work, they're gonna lose 50. Like it, it's again, you can't be like everyone else.

Average Joe Finances:
35:43

And key word there was if.

Tony Pawlak:
35:45

If Yeah.

Average Joe Finances:
35:45

If this works, exactly.

Tony Pawlak:
35:47

So it's focusing on if this doesn't work, I know exactly how much I'm gonna lose. If it does work, cool, I'm always shocked by how much I make. And that's again the opposite from everything else that you naturally think and everyone else that's trying to trade.

Average Joe Finances:
36:02

That's great. It's a mental thing, the, it's all about mentality and how you approach and that's any type of business or investment that you do, there's always risk in any investment, no matter what it is, but it's the mentality that you go into it with. You go into it with this understanding that, that no matter what, worst case scenario, this money's all gone. Best case scenario. I get surprised, right? So it. But again, there's also, it's not just that simple. There's the whole skillset that you explained earlier that you need to develop. And it's not just a, oh, I'm okay with losing a hundred thousand dollars, so I'll put it in and be surprised when I make money. No, that's not what Tony's saying. What he's saying is you gotta, yeah. That's what you have to accept. But at the same time, you have to have that skill set to be able to pay attention to the market and know where to get in, where to get out and you can alleviate. Any loss or really, exacerbate some of the gain. So that's yeah, just one of the things I wanted to tie in there. Thank you kind title. Put a little bow on top there.

Tony Pawlak:
36:58

I love it. That's ex, that's so true because I don't want someone thinking that's oh, I can just, that's all I have to do is just accept it. It's like need.

Average Joe Finances:
37:04

Yeah. Just accept that I have to lose it. Okay, sure. I could do that.

Tony Pawlak:
37:06

That's simple enough. Yeah, for sure. Skills, your ability to read these things, diagnose it, get an idea, and most importantly, the charts will also tell you where you're wrong. Yeah. They have certain levels that the price action will tell you. If we start getting below that. The bulls didn't come in, get out because it's heading down. And exactly.

Average Joe Finances:
37:27

Yeah. It all comes down to, like you said, Tony, the skillset, like a lot of my listeners invest in real estate. I'm a real estate investor too. I real estate multifamily syndications. I know that when I put my money into the syndication, it's gone. I've accepted that. It's gone. Yeah. But the other side of that is I've done my research on this project. I know. What the potential is what's being built around it? What's hap what the rent can be raised to. Yeah. So I know what gain I'm looking at on the backend. Yeah. But at the same time, you never know what can happen. We had, on one of our investments we ran into some hiccups because we had the lumber shortage, we had the supply chain issues, all that stuff that was going on, stuff that we didn't expect to come. But I invested with a really good team that had a lot of backups. Just in case something was to happen. It was just something that they all took into account and that particular investment is doing really well. But at the same time, it was close. It was like on that ledge where it's okay, you could lose something here. But that's one of the things that I knew going into it, that I accepted when I wired that money in. So I feel like this is the same, but not right, but it's that mentality of being able to accept what you're putting yourself into.

Tony Pawlak:
38:40

And then doing it with the right size. Here's the next little part with this. I put 1% of my trading account on each trade, 1%. So that's what I'm actually risking is 1%. So if I lose on that trade, I'm not done. And it's the same thing. Like you're not like putting everything you have under this. And it's it, I hope this works.'cause if not, then I've lost everything. It's no That's not how the stock market works. It's 1% of what you have. So if you have 10 grand, you're putting 1% on that trade and if it loses it's a drop in the bucket. And that's how you're able to control those emotions. Let it play out. You know where you're wrong, you accept that loss because that loss shouldn't be something keeping you up at night.'cause it's not enough money to percentage wise, right? Yeah. And people don't understand that. Also they go out there I'm putting my whole account, I'm putting it all on red. And that's one of the difference between trading and gambling. People are like, isn't that just gambling? It's no, gambling is all or nothing.

Average Joe Finances:
39:37

This is like what you did in the beginning that's listening to you talk right now. That's some of the key differences I see is how. You were like taking all your money and just going all in. Yeah. Versus what you're doing now. You're saying, you put 1% of your spending account into a trade that man, what a difference does that make, right. Versus going all in on something.'cause then, yeah, back then, when you first started, you were gambling, you were taking all your cash and just, throwing it in and crossing your fingers. Open a prayer

Tony Pawlak:
40:05

Right? Coin I hope it lands on heads,

Average Joe Finances:
40:07

that's what was, unfortunately they were just flipping one of those two tailed coins the entire time.

Tony Pawlak:
40:11

Exactly. That's what it felt like. Yeah, definitely.

Average Joe Finances:
40:13

Oh, man. Alright, Tony, so listen I wanna go ahead and transition this into something that I call the final round. It's where I'm gonna ask you the same four questions I ask everybody that comes on the show, and it kinds of gives us an idea of how you are under a little bit of pressure, which pretty sure we already know how this is because you already explained some of this stuff to us and how bounce back from it and crush it. But if you're ready to go. We'll get that party started.

Tony Pawlak:
40:34

Let's do it. Let's do it.

Average Joe Finances:
40:36

Alright Tony, so the first question of the final round is, what's the biggest mistake you've ever made when it comes to your finances? Investing real estate or just business in general? And let's take away what you started with at the beginning. Let's say after you've made that transition and you finally got this down, you were, into your groove and day training. What's the biggest mistake you've made since then?

Tony Pawlak:
40:58

Oh man. Not investing in myself more. I should have reached out to my mentor Jeremy way earlier in the process. I should have spent money instead of losing hundreds of thousands, I should have spent 50,000 on him. And it would've, so that's one of the, that's one of the biggest lessons that I've learned for sure. Get mentors, have someone that's already in that skill, teach you, spend money, invest in yourself is the best money you'll ever spend.

Average Joe Finances:
41:20

Yeah, I like that. I think education's super important. You're either gonna get it. From paying for it or you're gonna pay for it by learning the hard way. Yeah. So definitely appreciate that perspective. Tony, the next question kind of ties into this last one, they all tie into each other, but what is something that you've learned that you wish you knew when you first got started?

Tony Pawlak:
41:40

Oh man. It was gonna be harder than I expected and took longer than I thought. I wish I would've had that mentality and realized. Anything you do in life, there is no easy road. I, like I said, I'm not, I thought I'd make millions after a month and a half. Like this will be so easy. I wish I would've just had a different perspective and been willing to go through the grind, which I did go through, but mentally I wasn't prepared for that grind and it molded me. I had to learn real quick along the process, but having that expectation that I can do hard things, anyone can. Anyone can run a marathon today without any training. By the way. You could, you can walk most of it. It doesn't mean you have to finish in 30 minutes, right? Like you can, if it takes you 20, 30 hours and the marathon's gone and everyone's parked up, you could go out and do it today. But it's just proving yourself that you can do these hard things. And I guess just changing my expectations.

Average Joe Finances:
42:35

No, I love that. I love that mindset is so important. And I think that's like the name of the game when it comes to everything that you've done was really since you shifted your mindset. Yeah. Okay. So Tony next question is, do you have any tips or tricks that you would recommend to someone that is just getting started out today?

Tony Pawlak:
42:54

Man I've shared so many here, so I'm gonna try to think of something that I haven't shared tips or tricks. I would say again, control your size. Realize that the stock market's not this, get rich quick. It's a whole lot of small increments that are gonna slowly build up over time. You're risking 1%, so if you're wrong, you lose 1% of your account. When you're right, you're making two to 3% of your account, you're growing it slowly. I would say have that mentality going into it of this slow grind, not, Hey, I can press a button and make 50,000 tomorrow.

Average Joe Finances:
43:27

I think get rich quick is dangerous for anything.

Tony Pawlak:
43:31

Yeah. Yeah.

Average Joe Finances:
43:32

Yeah. No, definitely appreciate that. Okay, Tony, final question of the final round, and this one's a little bit different than the others, it's just an opinion based question, but do you have a favorite business investing or real estate related book or podcast or both?

Tony Pawlak:
43:49

Man book, I would say Trading in the Zone is one of my, one of my favorite books. I read that when I was going through my transition phase and just trying to get myself out. So for investors for trading it just helped me to figure out what the game of trading was and the game of trading is, you're gonna lose half the time, so stop trying to avoid losing and just accept it once. I was no longer scared of losing. People are like, how are you so brave? I'm like, there's nothing to be scared of. I don't have to be brave. I'm not scared to lose that money. I'm not scared to win. I just, my job is to see a setup, take a setup, and parts of that came from that book. And then of course, yours is just implementing it has put my own spin on everything. But that'd be my answer to that one is that's a great one.

Average Joe Finances:
44:34

Okay. Yeah, no, definitely. Great recommendations, so for people to go check out. Definitely appreciate that. Okay, so Tony, that is it for the final round. However, I do have one more question for you, and this is probably the most important question I'm gonna ask you today, because people are listening to this episode and they're saying, Hey, I really like what Tony's talking about. I wanna learn more about him. I wanna learn more about, his coaching program. Or where can I find this information? So with that being said, where can people find more information about you? Do you have a website you could share with us? Any social media profiles people could follow, YouTube, anything like that?

Tony Pawlak:
45:10

Yeah, totally. Reallifetrading.com is where you can find me and the real life trading community. I joined with this community four years ago because they were community on a mission to change this. There's so many people out there. Trading education is such a bad rap cause everyone's selling that get rich quick, pay me this and I'll just make you a millionaire. And it's, there's so much more that goes into it. So this was the, one of the first groups I found. It's we're worldwide, we have branches all over the world, Australia and England and America and all these other places. But W we're known for being honest. We post all of our wins, we post all of our losses. We're upfront and honest with exact expectations of what you can do. We're gonna teach you and show you our courses are the best courses you'll find hands down. And by the way, like 90% of the stuff is free. We offer the price. That's one heck of a price. Everything you need to know to get started in trading, we give on YouTube for free, so we have a decent following there on YouTube. You can come find us in real life trading. If you want to find out more about my story, I have a documentary on my whole story in life of the craziness of trading. And and then you and I have free courses. I have courses that you can buy if you want to come coach with me and all that stuff. And trade alongside of us. Reallifetrading.com/tonypawlak. And in there you can, that's one of the best ways you can get ahold of me. My contact information's right there on the website and my course is, I wanna do something special for your listeners. I normally charge a couple thousand dollars for a four week mentor group, where for four weeks people come and trade alongside me. We learn, I teach one-on-one kind of in this setting if someone grabs my courses, so I have. I have courses I charge a couple hundred dollars for. It takes me two years to make one course and it's, I don't put out a course unless I know it's gonna actually, if it's not an investment where it's like you can make your money back within a couple weeks with the stock market, then I don't put it out there. I only have a couple because it takes me that long to do. Whoever buys this, I will link them and I'll get them into that mentor group for free. So a $2,000 mentor group you're in it. If you're listening to this podcast in two years, it's already come by. I'll send you the recordings to that mentor group so you can have all the recorded sessions of all the extra education and one-on-one stuff that I do with my students to help them on their trading journey. Because at real life trading and also with my purpose, it's to enrich lives. It's what we want to do. If it wasn't for Jeremy, I wouldn't be here and I can't sit back and go I know how to click a button and make money. I wanna help someone else 'cause there's a million people out there that are walking that exact same journey and path that I walked that I can help. Without real life trading, without Jeremy, I wouldn't be here today. I'd be, I would've quit and gone back to my own life and I wouldn't be out here helping others and fulfilling my purpose in life. And so I want to just pour as much value as I can. And so that's something I wanna do. Any course, I have courses for like a hundred bucks. Buy it, you'll get into the$2,000 mentor group session. And again, if you're, if it's after it's already passed I'll send you all the info of when it's starting. But it'll be fall this year, 2023. After that, you can get the recordings and that'll have access to all of that stuff, plus information you get ahold of me and stuff. But I wanna do something just over the top and just give away as much as I can. And I want people that show that they're committed. If $200 is too much for you, trading is not for you. I can just, and I'm just, I turn, majority of my coaching, I turn down because I just, I'm sorry. Do this for right now. This is a better investment because if someone comes at me with 700 bucks, they're like, I wanna trade for a living. I'm like, I'm sorry, this is, I'll show you how to make money. Yeah. There's other places you can trade other people's money. Use their money. They take a cut, like I show them how to do this, but trading is a very, It has some enter entry barriers. And our goal is to at least teach you if you're not there yet. Again guys, there's always waste. There's money everywhere. There's money to trade. You can trade other people's money, finance that. They give you money to trade. We have funded accounts at real life trading, by the way, where you can put in a couple hundred bucks and get $50,000 to trade with. So we do that all the time. So Reallifetrading.com/tonypawlak, I can get all that info and it's all there. But I appreciate your time. Thanks for having me on and allowing us to, Fulfill our mission of just enriching lives and it's very real. You can make money in the stock market, and I know most people fail, but I'm gonna show you how to be different than most people. I'm gonna show you how to approach these markets like most people won't. And that's how you're gonna be successful. And that's how I've been able to be in this business for so long and continue to thrive and continue to grow and provide a living that I could have only dreamed of.

Average Joe Finances:
49:53

All right, Tony. That's awesome, man. Appreciate it and appreciate the offer that you're giving to the listeners too. Lots of value there especially to be part of that mentorship for free again, which is my favorite price. So definitely guys, go check out his courses. I'm gonna make sure I have. All the links in the show notes to make it easy for people to copy and paste or click away. I only ask that you don't do it. If you're driving, please wait till you get somewhere where you can pull over and take care of that. But Tony, again man, thank you so much for joining me today. This was awesome. I had a great time talking with you and learned a lot about the mentality behind trading. For sure.

Tony Pawlak:
50:28

My pleasure brother. Thank you so much for having me. It was a joy and I'm, I'll come back anytime you call me.

Average Joe Finances:
50:33

Absolutely. And hey, to my listeners, I wanna thank all of you so much for joining me and our special guest, Tony Pawlak, on the average Joe Finances Podcast. Go leave us a five star review and tell us what you liked about today's episode with Tony Aloha from Hawaii and have a great rest of your day.